Ken Hare In Depth: AL unlikely to soon grow its way out of school funding hole

MONTGOMERY, AL (WSFA) - A report released recently that highlighted the slow recovery in education funding among the states  since the 2008 recession showed that Alabama has the second greatest loss in state education funding in the nation.

The report by the Center of Budget and Policy Priorities showed Alabama ranked behind only Oklahoma  in state K-12 education funding cuts. State support was down more than 17 percent since the start of the Great Recession.

When the CBPP looked at combined state and local investment funding in public schools, Alabama was down more than 11 percent per student between 2008 and 2014. That was the seventh worst reduction in funding among the states.

Considering that Alabama's state and local funding for public schools has always been among the worst in the nation, it should be clear to anyone with (as we say in the South) a lick of common sense that education quality will be impacted from this revenue downturn.
But with a Legislature that has shown almost complete disdain for school funding, the only hope for the state to overcome that downturn is to grow its way out of the hole.

However, two factors make that unlikely anytime soon: First, Alabama is among the states that have been slow to respond to the national economic uptick. Second, despite education funding in Alabama already taking a beating from the economy, some state legislators are considering diverting future growth in education revenues to help shore up the state's ailing General Fund budget.

Nationally, it has been two years since total state tax revenue recovered from its plunge in the Great Recession. By the end of the second quarter of 2015, states collectively had 5.6 percent more tax revenue than they did at the 50-state peak in the third quarter of 2008, after adjusting for inflation.
But a report by the Pew Foundation says "the total masks how widely recovery has varied across the states. In five of the 29 states in which tax revenue had recovered by the second quarter of 2015, receipts were more than 15 percent higher than at their inflation-adjusted peak before or during the recession. Conversely, collections in three of the 21 states with below-peak tax revenue were down 15 percent or more, after adjusting for inflation."
Alabama is one of the states that still had not recovered fully. Pew reports that by mid-2015, Alabama tax revenue was still down 6.4 percent from its pre-recession high.

Second, the pressure on the state's troubled General Fund budget has Alabama legislators considering removing "earmarks" that tie certain revenue to specific purposes. Alabama earmarks about 90 percent of the tax revenues it takes in. That's far too high to be reasonable. The national average is about 25 percent. A significant portion of Alabama's earmarking sets aside specific revenue for public education.

But while unearmarking makes fiscal sense, doing it as a way to divert education funding to the General Fund does not. Alabamians who support adequate funding for public schools should question whether unearmarking proposals would further erode school funding.

Funding quality education programs is a key to Alabama's economic recovery.

Michael Leachman, CBPP state fiscal research director and a co-author of the education funding report, put it this way: "As the nation is trying to produce workers with the skills to master new technologies and adapt to the complexities of a global economy, states should be investing more – not less – so our kids get a strong education."

Kimble Forrister, executive director of the Alabama Arise Citizens' Policy Project, also said the education revenue downturn could make it more difficult for Alabama to attract well-paying jobs.

"If we want a strong future for our state, we need to invest in it now," Forrister said. "Alabama must invest in our schools so our children and grandchildren can receive the education they need to succeed in life and help their families get ahead."

Both Leachman and Forrister are on target; Alabama cannot prosper economically over the long haul unless it invests a reasonable amount in public education.

I am not naive enough to believe that many of the state's current crop of legislators have the foresight to raise taxes to further invest in education.  But I sincerely hope the state's voters will begin to change that dynamic in future elections.

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Ken Hare is a retired newspaper editorial writer and editorial page editor who now writes a regular column for wsfa.com. Feedback appreciated at khare@wsfa.com.

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